Bank accounts must be unfrozen while securing only the specific disputed amount in fixed deposits.

The petitioner approached the High Court under Article 226 of the Constitution seeking a writ to compel Axis Bank to defreeze/remove a lien on his bank account

The account had been frozen based on intimations from cyber crime agencies regarding alleged cyber fraud.

The petitioner contended that his case was identical to the precedent set in Malcolm Murayis & Ors. v. State Bank of India and Others (W.P. No. 1100/2024), involving crypto traders whose accounts were frozen without prior notice or strict compliance with procedural laws governing seizures

The court primarily relied on Article 226 of the Constitution of India regarding the issuance of writs

It applied the procedural requirements of Section 102 of the Code of Criminal Procedure (Cr.P.C.) and the relevant provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which mandate that investigative agencies report seizures to the concerned Magistrate

The court further applied the judicial precedent of Malcolm Murayis & Ors. v. State Bank of India and Others, which established a "middle-path" remedy for account holders by isolating disputed amounts in fixed deposits while allowing the operation of the remainder of the account

The Court found that the petitioner’s situation was squarely covered by the Malcolm Murayis decision and applied its findings mutatis mutandis to the present case

In the cited precedent, the court had criticized the "irresponsible approach" of cyber crime cells that freeze accounts via email but fail to respond to court inquiries or comply with the mandatory reporting requirements of Section 102 Cr.P.C.

The Court reasoned that to balance the interests of the investigation with the petitioner's rights, only the specific disputed amount flagged by the agencies should be secured

By directing the bank to convert the disputed sum into a fixed deposit, the Court ensured the funds remained available for potential recovery while preventing the indefinite and total freezing of the petitioner's financial resources

The bank was ordered to keep only the disputed amount in a fixed deposit (FD).

The Court held that this FD can only be liquidated upon the orders of a competent Judicial Magistrate within a three-month period

If the police agency fails to proceed in accordance with the law (BNSS/Cr.P.C.) within these three months, the petitioner is permitted to withdraw the FD amount under intimation to the agency